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MSP Recovery, Inc. (MSPR) reports continued operational activity but clear liquidity and legal timing risks. The company identified recoverable claims using proprietary Algorithms and reported total recoveries of $1.4 million for the six months ended June 30, 2025 and gross recoveries of $18.1 million for 2024. Intangible assets related to a consolidated VIE were $1.2 billion at June 30, 2025 versus $1.4 billion at December 31, 2024. The company disclosed significant related-party interest expense (e.g., $92.9 million and $182.3 million reported in certain periods) and material related-party balances. Working capital funding included $2.1 million from Yorkville (with $0.36 million unfunded) and $6.8 million advanced under the Hazel Working Capital Credit Facility; however, no capacity remains under that facility as of the filing. Legal risk: an Eleventh Circuit ruling could reduce PVPRC by an estimated $10.8 billion if applied broadly, and the company is pursuing tolling and other legal strategies. The company also disclosed that it has not recognized certain TRA liabilities because realization was deemed not probable.
MSP Recovery, Inc. confirmed its Standby Equity Purchase Agreement (SEPA) with Yorkville remains active, under which it may sell up to $250.0 million of common stock subject to conditions. Yorkville agreed to provide convertible promissory note advances with aggregate principal of $16.5 million. The filing details five prior notes (combined principal $16.5 million) with net proceeds disclosed for each issuance and a sixth Convertible Note for $0.75 million whose net proceeds will be disbursed in two payments of $0.36 million on August 8 and August 15, 2025.
The Convertible Notes convert at the lower of a Fixed Price or 95% of the lowest daily VWAP during the five trading days before conversion, but not below a $0.50 floor, and conversions are limited to avoid Yorkville exceeding a 9.99% ownership cap. Yorkville may also require issuance of shares to offset outstanding note balances (a "Yorkville Advance"). The company disclosed its 2025 Annual Meeting results: ~6,226,781 shares (≈75.53%) present; three Class III directors were reelected and the ratification vote for Deloitte as auditor passed, while the company previously engaged Baker Tilly to serve as its independent auditor for the remainder of 2025 beginning in Q3.